At a glance
KAUG charges 0.79% a year, below the 0.86% average of the 7 funds most like it (the cheapest of 8). It has $99.6M in assets, the 8th largest of that group. Over the past year it returned +7.8% with distributions reinvested (S&P 500: +11.5%), the weakest of those 8 funds.
The short version
Innovator US Small Cap Power Buffer ETF - August (KAUG) is a buffered ETF. It uses options tied to US small-company stocks to absorb part of any loss over a set outcome period, and in exchange it caps your gains. Its 0.79% expense ratio is below the 0.86% average of similar buffer funds. However, its 7.8% one-year return through October 27, 2026 was the lowest of the eight funds compared.
Price history
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KAUG +7.8% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| KAUG price data to Oct 27, 2026 | +7.3% | +7.8% | — | — | — | +7.0% |
- Over the year to Oct 27, 2026, KAUG returned +7.8%, 8th of 8 among similar funds.
- Its worst full calendar year was 2025 (+5.5%); its best was 2025 (+5.5%).
- The deepest fall in its price history was 15.7% (Nov 25, 2024 to Apr 8, 2025), recovered by Oct 20, 2025.
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | +7.3% |
| 2025 | +5.5% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
How it works
KAUG is a defined-outcome fund, a type of fund whose possible results are set in advance for a fixed stretch of time. It does not try to beat the market. Instead, it uses options (contracts whose value moves with an underlying asset) linked to US small-company stocks. The goal is a known range of results over each outcome period. If small caps fall, the buffer absorbs losses up to a set amount. If they rise, your gain stops at a cap. Innovator sets the options up at the start of each period.
The protection works best for someone who buys on the first day of an outcome period and holds until the last day. If you buy partway through, your buffer and cap may be quite different, depending on how the market has moved since the period began. During a period the share price can still fall sharply. The fund's deepest drop was 15.7%, from November 25, 2024 to April 8, 2025.
Our sources did not include the fund's SEC prospectus. So the exact buffer size, the cap level, the reference index and the period dates are not covered here. Check them with Innovator before buying, because the cap resets with each new period.
What it really costs
- KAUG charges 0.79% a year, versus an average of 0.86% for the similar funds below (1st of 8, cheapest first).
Structure and tax notes
- Uses options to limit losses within a range (the buffer) in exchange for a cap on gains over each outcome period; results depend on when you buy relative to the period start.
In a retirement portfolio
KAUG trades some of small caps' upside for a buffer against losses, and its one-year beta of 0.45 shows it moved less than the broad market.
KAUG could take some of the swings out of a small-cap allocation. Its one-year volatility was 7.3%, and it returned 5.52% in 2025, its only full calendar year. The fund launched on August 1, 2024, so it has no record from the 2008, 2020 or 2022 downturns. Its deepest drop was 15.7%, from November 25, 2024 to April 8, 2025. It took about 6.4 months to recover, regaining its peak on October 20, 2025. A retiree forced to sell near that low would have locked in a real loss, buffer or not. The fund has paid no distributions, so it provides no income. Its 0.79% expense ratio is below the 0.86% peer average but well above plain index funds. Past results don't predict the future, and any plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want some small-cap stock exposure with options-based loss protection and can hold a full outcome period.
- Cost-conscious buyers of buffer funds: its 0.79% expense ratio matched the lowest of eight similar funds.
- Investors who accept capped gains in exchange for steadier results, given its one-year beta of 0.45.
Look elsewhere if
- Retirees who need regular cash: KAUG has recorded no distributions.
- Investors who want a long track record or a large fund: it launched in August 2024 and held $99.6 million.
- Investors who want full small-cap upside: its 7.8% one-year return trailed all seven similar funds.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| KAUG this fund | 0.79% | $99.6M | +7.8% | — |
| BUFR FT Vest Laddered Buffer ETF | 0.95% | $10.49B | +11.6% | +16.8% |
| BUFD FT Vest Laddered Deep Buffer ETF | 0.95% | $2.04B | +9.5% | +13.9% |
| PJAN Innovator U.S. Equity Power Buffer ETF - Ja… | 0.79% | $1.44B | +10.5% | +14.8% |
| PDEC Innovator U.S. Equity Power Buffer ETF - De… | 0.79% | $984.1M | +11.6% | +14.9% |
| FDEC FT Vest US Equity Buffer ETF - December | 0.85% | $1.31B | +12.9% | +18.5% |
| FJAN FT Vest US Equity Buffer ETF - January | 0.85% | $1.47B | +12.3% | +17.4% |
| FFEB FT Vest U.S. Equity Buffer Fund - February | 0.85% | $1.42B | +12.9% | +18.6% |
Questions investors ask
How does KAUG's buffer work?
KAUG uses options to cushion a set amount of losses on US small-company stocks over each outcome period. In exchange, it caps how much it can gain. The 'August' in its name marks the month each period begins. Over a full period, the buffer absorbs losses up to its set level, but deeper drops pass through, and any rise above the cap is given up. Investors who get in partway through a period may face a different remaining buffer and cap, so timing matters.
Does KAUG pay dividends?
No. KAUG has recorded no distributions since it launched on August 1, 2024. Buffer funds like this one generally hold options linked to stocks rather than the stocks themselves, so they don't pass along the dividends those companies pay. Its returns come from price changes alone. Retirees who depend on regular payouts may want to compare it with dividend or bond funds, since KAUG is designed to limit losses rather than produce income.
What is KAUG's expense ratio?
KAUG's expense ratio, or yearly fee, is 0.79%. That is below the 0.86% average of seven similar buffer funds and tied for the lowest in that group. Innovator's PJAN and PDEC also charge 0.79%, the FT Vest US Equity Buffer funds charge 0.85%, and FT Vest's laddered BUFR and BUFD charge 0.95%. The fee comes out of the fund's value automatically. Plain small-cap index funds, which simply hold the stocks, typically charge less because they don't run an options strategy.
Is KAUG safe for retirement savings?
Not entirely; KAUG can still lose money. Its worst drop was 15.7%, from November 25, 2024 to April 8, 2025, and it recovered about 6.4 months later, on October 20, 2025. Its one-year beta was 0.45 as of October 27, 2026, meaning it moved less than half as much as the stock market. It may suit retirees who accept capped gains in exchange for a cushion, but it didn't exist during the 2020 crash or the 2022 bear market.
What's the difference between KAUG and PJAN?
Both are Innovator Power Buffer ETFs charging 0.79% a year, but they cover different stocks. KAUG applies its buffer to US small-company stocks, with periods starting in August. PJAN applies it to US equities, with periods starting in January. PJAN is much larger, with about $1.4 billion in net assets as of July 31, 2026. It returned 10.5% over the year to October 27, 2026, against 7.8% for KAUG. Because they hold different kinds of stocks, one is not a direct substitute for the other.